The specific aims of this project are to examine empirically the effects of using cigarette excise taxes to discourage cigarette smoking and, hence, smoking related morbidity and mortality, particularly cancer morbidity and mortality, in the United States. Also of interest is the impact of clean indoor air laws on cigarette smoking behavior. An empirical framework is developed from a theoretical model of rational additive behavior, resulting in cigarette demand equations and smoking decision equations quite different from those used in the past. The predictions of the model concerning the direction and magnitude of past, current, and future cigarette prices and past and future cigarette consumption, as well as the magnitude of the long run price elasticity of demand will be tested empirically using Cycle I of the National Health and Nutrition Examination Survey and its followup. The combination of these surveys yields a longitudinal data set with a unique quantity of information of life-time cigarette smoking patterns. Some specific questions which will be addressed are: Is cigarette smoking an additive behavior? Do smokers behave myopically or rationally? How responsive are cigarette smokers to changes in the price of cigarettes? What do these estimates suggest about the magnitude of the response of cigarette smoking to changes in the Federal excise tax rate on cigarettes? Are the effects limited to infrequent smokers or, as the model suggests, do heavy smokers respond more to price changes in the long run than light smokers? Are the price induced changes in smoking limited to reductions in the number of cigarettes consumed or do they lead to smoking cessation as well? How are smoking initiation and cessation affected by changes in the price of cigarettes? Are there differential price effects across sexes and/or races? Using epidemiological studies from the 1970's and 1980's, the results obtained from the estimated demand equations will be used to predict the health consequences of the reductions in smoking provoked by increases in the Federal excise tax rate on cigarettes, particularly the reductions in the smoking related cancers induced by changes in taxes.